Updates, news, and musings on the latest developments in white collar crime defense, government investigations, and enforcement actions

by Ariel A. Neuman

Paying Cash? The Feds Want to Know.

Paying Cash? The Feds Want to Know.

August 2017

Paying cash for your home or property? The Government wants to know all about you. Even if you’re paying via a wire or other electronic transfer.

Continuing its efforts to combat money laundering, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) this week expanded its “geographic targeting orders” that were in effect for the areas surrounding Los Angeles, San Francisco, San Diego, New York, Miami, and San Antonio.

The GTOs, which were meant to be temporary but have been renewed several times, require title insurance companies to report cash purchases of real estate above certain dollar thresholds if cash or cash equivalents (checks, money orders, etc.) were used. The big news it that wire transfers and other electronic transfers are now included in the mix as well. Basically, if you’re not taking out a loan, you’re going to be reported. And if you are buying property in Honolulu, you will now be reported as well.

The Fed’s goal is to deter people from hiding their money in real estate purchases made through shell companies. So, for transactions falling within the FinCEN GTOs, title insurance companies are required to obtain and report (on a FinCEN Form 8300) identifying information for “the individual primarily responsible for representing the purchaser.” The title insurer also has to keep a copy of that person’s driver’s license, passport, or other ID on file, and has to report details of the transaction in question to the feds. Failure to complete and file the Form 8300 is potentially a felony.

By the way, the price of that cash purchase that’s going to be reported to the government? Anything over . . .

$500k in Bexar County, Texas

$1m in Miami-Dade, Broward or Palm Beach Counties, Florida

$1.5m in New York City (except Manhattan)

$2m in Los Angeles, San Diego, San Francisco, San Mateo, or Santa Clara Counties, California

$3m in Manhattan

$3m in Honolulu County, Hawaii

Shows you what the government thinks is “luxury” in each of these areas.